Coal industry seeks to export through Wash. state

SEATTLE 
The coal industry is maneuvering to sharply ramp up its U.S. exports to Asia out of the West Coast, with the first of several potential port expansions along the Columbia River now before officials in Washington state.

Australia-based Ambre Energy asked Cowlitz County commissioners Tuesday to approve a port redevelopment that would allow for the export of 5 million tons of coal annually.

That volume is trivial compared to total U.S. production, which topped 1 billion tons last year. Yet the proposal is emerging as a flashpoint in an ongoing struggle between the industry and environmentalists, who want to halt coal exports that they fear could accelerate climate change.

The fuel would come from the Powder River Basin of Wyoming and Montana, where Ambre has been in discussions to buy an idle mine.

Coal terminals also are proposed at two other sites along the Columbia River, just upstream at the Port of Longview and in Woodland, Wash. Those appear to lag Ambre's plans, which was recommended for approval by Cowlitz planning officials.

A decision on the company's redevelopment plan is expected next week. The project, which is being handled by an Ambre subsidiary, Millennium Bulk Logistics, would include dredging the river to accommodate large vessels and the installation of conveyor belts and other equipment.

A shortage of coal-capable ports has so far hampered export plans. Most of the coal from Western mines is currently funneled through a single facility in Vancouver, Canada.

Despite that infrastructure bottleneck, exports to Asia during the first six months of the year increased almost 400 percent versus 2009, to 9.5 million tons.

The proposal is opposed by environmental groups and the Yakama Indian Nation. They say increased coal exports could harm the Columbia River and worsen global warming by increasing the burning of fossil fuels.

Yet coal companies are counting on the fast-growing Asian market to make up for sagging domestic demand. With many utilities turning to natural gas and renewables like wind and solar, opportunities for coal's domestic expansion are limited.

"The markets nationally are questionable, but it's unquestionable the demand that exists overseas - in a wide variety of countries and into the foreseeable future," said Bud Clinch with the Montana Coal Council.

Industry giants Peabody Energy and Arch Coal have said repeatedly in recent months that Asian exports are a major component of their future business strategy.

Two other companies already are shipping Montana coal to Asia - Cloud Peak Energy and Signal Peak, which is jointly owned by FirstEnergy of Ohio and Boiche Group.

Groups including the Sierra Club and Columbia Riverkeeper have vowed to stop the industry's expansion into Asia, a market currently dominated by coal from Australia and Indonesia.

"(Ambre) seems like it's in a big rush to get this approved quickly and quietly," said Dan Serres with Columbia Riverkeeper. "Someone better be asking tough questions up front, because once you approve it, it's going to be gaining momentum."

About two dozen people spoke out against the Ambre Energy proposal at a Tuesday hearing in Cowlitz County, with only a few people offering support, said Clerk of the Board Vickie Musgrove.

Most people wanted to talk about coal and mining coal, said George Raiter, chairman of the board of commissioners. But he said the hearing was on shoreline development - adding that the county planning department determined there would be no significant enviromental impacts that could not be reduced.

Washington Gov. Chris Gregoire so far has avoided the coal export debate. Spokeswoman Karina Shagren said Tuesday that Gregoire is balancing the need for economic growth against environmental concerns.

"The governor will be working with her agencies on balanced regulatory decisions - and until those decisions are made, she doesn't lean strongly one way or the other," Shagren said.

Representatives of Ambre Energy did not immediately return telephone calls from the Associated Press seeking comment.

According to the Montana Department of Commerce, the company was in talks late last to buy the East Decker Mine near Decker, Mont., currently owned by Level 3 Communications.

Level 3 spokeswoman Jennifer Swonger said Tuesday that East Decker has not been sold, but declined further comment.

In February 2009, Ambre executives visiting Montana said they planned to build a $375 million plant in the state that would produce high-efficiency coal and synthetic crude oil.

They said the project would produce up to 4.4 million tons annually of coal that had been stripped of moisture to increase its energy content. That process could also make it more economical to ship the fuel overseas. It is uncertain if the company is still pursuing the project.